NNPC spends $1.8bn on fuel import per quarter; allocates 600 trucks of fuel to IPMAN, 500 to NOMAN, 400 to NNPC outlets

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The Nigeria National Petroleum Corporation (NNPC) said on Wednesday that it spends $1.8 billion in 90 days to import fuel.
The Group Executive Director Upstream of NNPC, Mr Bello Rabiu, stated this while addressing State House Correspondents.
According to him, the organisation spends between $16 million and $20 million on imports daily totaling about $1.8 billion per quarter.
Rabiu was reacting to the inability of the nation’s refineries to provide the local needs of consumers. He said that the organization had to rely on importation to satisfy local consumption.
He said that import bill depended on both volume and the price adding that a cargo of product, about 40 million litres, as at today costs about $13 million to $14 million dollars.
He said that the country produced about 2.2 million barrels of crude per day but only about one million belonged to NNPC through 60 per cent equity in the Joint Venture.
“The average equity crude for sale is not up to one million barrels which means that the total amount of money we can get is about $40 million dollars’’, he said.
According to him, if half of the amount is used to import products, it leaves a lot of implications for the economy.
He said that the organisation also spent money to produce which reduced the accruals. “We spend about $30 million to produce.
“We try to maximize what is available’’ he said, adding that over 90 per cent of other imports were financed by the oil sector.
“That is why we said we need to diversify, export more and import less’’, he noted.
He said that more countries now produced oil and that some producers that came out of crisis such as Libya had joined in the crude market.
He said it was unfortunate that most of the oil producing countries were import- dependent.
He said that for the local refineries the nation could not get more than 15 million to 20 million litres of PMS out of them but could produce enough kerosene and DPK (diesel) if they operated at 90 percent installation.
The Group Executive Director, Refinery, Mr Anibor Kragha, said the operators were focused on increasing fuel supply to markets outside Lagos and Abuja.
On the pipelines, he said most of them were on pressure testing to ensure safety before pumping through them.
He said that the Enugu depot would take some time to be revived but added that Aba depot was ready to service the entire East.
He said that between Aba and Enugu, a lot of pipelines were removed and taken away by vandals and needed to be replaced.
“We just have to work on that one and we can pipe from Aba to Enugu then to Makurdi and Yola.’’
Rabiu also said the Corporation had allocated 600 trucks of petrol to Independent Petroleum Marketers Association of Nigeria (IPMAN), 500 trucks to major oil Markerters Association of Nigeria (MOMAN) and 400 trucks to its sales outlets to ensure adequate supply.

He said “as you know, we have three segments of marketing fuel in Nigeria, we have IPMAN, the independent marketers, we have MOMAN, the major marketers and we also have NNPC-owned retail.

“We allocated them trucks on a daily basis to deliver to their own stations.

“Every day, NNPC retail will have 400 trucks, IPMAN, which is the independent marketers across the country are being given 600 trucks and MOMAN, the main marketers who are selling in major cities in the country are having 500 trucks.

“This is more than what we actually require but we are trying to ensure that everybody is satisfied.”

According to him, the Port Harcourt Refinery is delivering five million litres of petrol everyday (about 120 trucks), which is more than enough for Port Harcourt area and Bayelsa.

He said that the only way the organisation could import was through the use of foreign exchange.

He noted that oil sales had gone down by more than one-third from more than $100 per barrel to about $30 per barrel.

He attributed the scarcity of the product to the low cost of oil in the international market, noting that NNPC had devised three means of solving the foreign exchange problem.

He explained that the Corporation sold crude oil directly and got refined products, saying it had also connected its major marketers, the joint venture partners, who also sell directly and dedicated some money for their downstream companies.

Explaining further, the GED downstream, Mr Henry Obih, said that the Department of Petroleum Resources (DPR) had issued NNPC the right to import 79 per cent of petroleum in the first quarter of 2016 and 42 per cent in the second quarter.

He said that between IPMAN and MOMAN, the rest of the requirement for the market would be borne by the two groups.

“What we have done as a Corporation is to go beyond our core to not only cover our own share of the import requirement for second quarter but to also over-provide because it is clear that the reason for the situation we have today is because we had a breach in the supply chain.

“There was a time we could not meet the requirement and people panicked and started buying more than they usually buy.

“From our perspective, we usually plan based on consumption and once that increase happens, it is not easy for us to react as NNPC to cover that sudden increase in demand because we don’t have sufficient refining capacity in Nigeria.

“We therefore depend on foreign refineries for our demand.’’

Obih noted that the nation was now comfortable in supply because cargoes were lined up at sea to help overcome the situation.

“For next week, the outlook is to bring in eight cargoes just NNPC ourselves, excluding the imports from MOMAN and other importers.

“The week after, our projection is to have 12 cargoes on Nigerian waters to cover the supply and demand balance.’’

He also said that the NNPC was collaborating with other agencies to ensure that those with approvals to import would be able to bring in the cargoes on schedule, noting that “we are totally committed in getting out of the current situation and we are working to ensure that this does not happen any time soon and it does not happen in future.’’

He added that the Corporation was collaborating with other agencies to prevent diversion and secure pipelines.

He said crude oil was being moved up to Kaduna refinery, adding that through the pipelines, crude had also moved from Bonny Island to Port Harcourt without any loss.

He reaffirmed the warning by the Minister of State for Petroleum, Dr Ibe Kachikwu, to confiscate products being hoarded at filling stations and dispensing free to users.

According to him, any station caught a second time will have its licence seized and reallocated.

On the current state of refineries, the GED Refineries, Mr Anibor Kragha, said the key issue was addressing consistency of crude supply after which capacity utilisation would follow.

He said that the refineries had started to run with Port Harcourt delivering about five million litres a day, Warri delivering between two million and 2.5 million litres of petrol per day, while Kaduna refinery for the first time in so many years was receiving crude.

“What we are doing now is to raise money to high grade our facilities. We are looking at how we are going to get funding to get to capacity utilisation and when that happens, we will be able to deliver a significant quantum of products to the market.

“Our target for this year is at least 75 per cent utilisation but first of all we need to secure the crude supply and get the crude consistently,’’ he said.
Meanwhile, the Corporation, on Wednesday, apologised for the lingering fuel scarcity in the country.
It, however, assured that the problem had been resolved with adequate supply of Premium Motor Spirit through import and the local refineries.
Also, NNPC spokesman, Garba Deen Mohammed, Rabiu and other NNPC chiefs said in Abuja that five vessels had berthed in the ports discharging products all over the country.
According to Bello, the ships are in Lagos, Port Harcourt and Warri ports to complement importation from private dealers all together discharging at least 120 million litres of products.
Bello said that in moving the products up to the hinterlands, the NNPC had the only option of trucking as most of the pipelines were not working.
He said NNPC was in a position to take PMS from the Atlas cove jetty up to Ibadan while the rest of the distribution was being done through the depots in the Lagos area.
“We are almost on 100 per cent on trucking to the hinterland; that is the only way we can get it to the whole market but the plan is that going forward from today we want to ensure that we give more than we require in the whole country.
“The actual requirement of the country is just 1,300 trucks but our plan is to make at least 1,500 trucks available every day until all the problems are solved.
“We want to make sure that we saturate the market in a very short time and presently, Lagos is cleared, Abuja is getting better and other places will follow’’, he said.
Bello added that NNPC pushed 160 trucks into the cities across the country on Tuesday.
“We are now in a position to say that each state’s demand has been captured; we know the need and we are trying to ensure that all the states are supplied’’, he added.
He said that henceforth, the organisation was ready to announce the daily supply of PMS to the states and that the governors had expressed readiness to put task forces in place to ensure that the products were delivered to the consumers.
He said NNPC was ready to ensure there was no repeat of the scarcity.
“On behalf of the management of the NNPC, we are sorry for what has happened and we are working very hard to ensure that this thing will not happen again.
“Going forward, we are ensuring that we don’t have this again and we are doing everything possible to have in-country storage, strategic storage that will not allow us to go into this situation.
“Once our depots inside the country are actually wet, it will not take anybody more than four hours to take the products from our depots to his station.’’
Bello said that once the pipelines were revived, products would move further into other parts of the country.
“We are doing three things at the same time: ensuring sustainable imports, making sure that refineries work and the pipelines also work.
“That will reduce all these incidences and once we achieve that stability, queues in Nigeria will be a thing of the past’’, he said.
He also urged Nigerians to reduce the tension in the country by not wasting time in the filling stations, adding that all the stations in FCT as at Wednesday had been supplied with fuel.
“Not a single station in Abuja is dry and we will sustain this to ensure that no station is left unattended not only in Abuja but also the states around Abuja’’, Bello added.
He said the corporation was making sure that trucking was efficient having solved the supply problems.

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